Well the last dance has been played, the sparklers have been lit and you have run through the tunnel of your closest friends and family into the big black car that’s waiting to take you into your future. So what now? The honeymoon ends and you begin the process of settling down. Part of that process is figuring who does the dishes, who mows the lawn, how you’re going to do your banking, long and short term goals, and where you are going to live. I remember when I was in my mid twenties and the concept of owning a house scared me to death. I thought to myself,

What is a credit score and how does it work? How do mortgages work? How do you even get one? How do you save enough money to buy a home?

I started thinking about how no one really educates us on these landmark achievements in live. So I thought for this blog submission I would reach out to some friends of mine who specialize in first time home buyers to hopefully bless you with some powerful knowledge and facts. So we congregated at one my very favorite restaurants in town, The Yellow Porch, and discussed everything you would need to know about buying a home. Jon Human is a realtor with Blackwell Realty who has a heart for those who have always felt they would not be able to achieve their dream of owning a home. And Rory Lithgow(NMLS# 31480) from Interlinc Mortgage Services got into lending because of a bad experience he had when buying his first home. So welcome to your dream team for first time home buyers. This is what they had to say…

1:

What are the biggest things that keep young couples from buying a home?

I don’t think I’m going to qualify because I don’t have the greatest credit, I haven’t been working for very long, I don’t have a down payment.

Sound familiar? The truth is after sitting down with Jon and Rory I started to learn that the real estate market is actually designed for first time home buyers. Banks like to make money. Shocker, right? They do that by making wise investments on home buyers. But if they didn’t make it easy for a first time buyer to get into a home then they shut that person out of the system and therefore cannot make any money on them. So, a system is created to “lend” a hand. Most people don’t realize that their credit may not be as bad as they think. Most people don’t realize that first time home buyer loans may only require 3-3.5% down which is very attainable. Most people don’t realize that a good agent and lender will know how to navigate the system to give the first time home buyer every advantage to getting into a home. Now it’s true that the Nashville market is so saturated with agents, lenders and homes that it’s difficult to even know where to start. And a lot of the hesitation is driven out of fear or misunderstanding but that shouldn’t keep you from sitting down with someone who can guide you properly. Look, I’m introducing you to two great places to start right here in this blog. It’s never too soon to think about your future as a newlywed, and all that we are suggesting here is that investing for the future is easy- in real estate and in a market like Nashville.

2:

How is investing in real estate a great way to prepare for the future?

Budgeting does not sound like fun. In fact, most of us are pretty bad at doing it. Did you know that if you took $100 a month and put it into a savings account from the age of 25 until you are 65 you could have over $500,000 in the bank for retirement. Now that’s based on a 10% return which is amazing, but even at a lower return most of us can figure out how to save over $100 amonth. For me it would cutting down on iTunes purchases!

Equity in a home is the best savings account you can have because it is hard to get to.

Even though, in theory, saving is easy. We have a hard time doing it because when things get tough having access to that $100 we have been putting away makes too tempting of an offer. In real estate your equity is growing year after year and although you could have access to it there are quite a few more steps you have to take. So it’s not near as tempting, and therefore your investment continues to grow and stay safe all the while.

3:

So that sounds good. But what is the biggest pitfall for a first time home buyer?

Despite the market being primed for first time buyers there are still some things to be on the lookout for. The first of which is to make sure you have a good team. In a hot market the customer service and education may not be as good as it could be because some groups are operating like mortgage assembly lines. So if you’re not getting your questions answered then move along.

Jon’s advice? To have reasonable expectations. DO NOT believe what you see on HGTV. Very few people in the real world who are painters and Al Paca farmers may qualify for a $3-million dollar home. Just be realistic with what you can get. Rory’s advice? To go along with Jon’s , is to not over extend yourself on the first home. Buy to get into the market and make money on the first home. It’s most likely not going to be your last home so buy beneath your means. You don't want to end up house poor, for lack of better terms.

4:

So how do you manage this home you just bought?

Congratulations you just bought a home! Now you have grass to mow, water heaters to replace, pipes that burst…Oh JOY! How can you prepare for these things? Well let’s get back to Jon and Rory’s point of reasonable expectations. As a first time home buyer the fact that you are in a situation of having a low or no down payment should not make you want to go buy a new 60” TV. By buying a home you can handle and by using this unique one time opportunity to keep some cash in the bank you can get a jump start on a emergency fund or actual savings account. When you own a home bad things will happen. Stuff will break. My AC/Heat unit went out on Christmas day the year I bought my current home. It’s going to happen and fixing those things are not cheap. Again, don’t over extend yourself and use some of that cash as your emergency/house fund. If you do that then one of the biggest excuses for not wanting to own a home becomes null and void.

5:

Final Thoughts?

Here are the benefits that owning a home will provide you for your future:1: Growing equity which is the same thing as putting money into a savings account2: Less money per month then renting in our current market3: Interest on your loan is tax deductible so you’re saving money on your taxes4: You can continue to buy homes and keep the previous ones for renting. Even if you just break even on the payments the equity is still growing and therefore now you have several “saving accounts” just accumulating wealth.5: Once you pay a home off you have 100% equity to borrow against to start a business, buy another home or flip some homes for cash. Owning a home is power in your hands and when you start at a younger age that power can fasttrack you to achieving your goals as a couple.

My Advice:

Attend one of Rory’s budget seminars that he holds the 2nd Tuesday of everymonth. It’s free and you can get some great skills for preparing for your future and he can educate you further on buying a home. Meet with Jon who has an amazing pulse on the young buying market and can show you the neighborhoods and parts of town with the best investment opportunities. Having these meetings should not be intimidating. You may find that being a home owner is a lot easier than you thought it would be..!